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Graduate competition for jobs in China will be even tougher this year as large numbers of Chinese students are expected to return from overseas studies, according to Chinese officials.

Students returning from universities in America, Britain, Australia and other countries such as Japan and South Korea will join a record 7.27 million students who graduate in June from China's own universities - an increase of almost 280,000 from last year's record of 6.99 million, as revealed by statistics from the Ministry of Human Resources and Social Security.

Already 2013 was the "hardest year for finding a job", according to the Chinese Academy of Social Sciences, or CASS, which put the unemployment rate for new graduates as high as 17.6% in 2013.

In 2012 it was around 10% six months after graduation - a figure that is not considered reliable as universities themselves report employment rates of their graduates up to six months after graduation.

"Competition for jobs is fierce. Some say last year was the hardest, but I believe this year and next year will be difficult as well," a history professor at Shanghai Normal University, Su Zhiliang, told official Chinese radio.

Graduates from a rural background who are not studying at the best universities face a jobless rate of almost 30% compared to 12% in cities, according to the CASS survey released in late December.

"It is a problem because graduates who come from the countryside and small towns don't want to go back," said Yang Rui, a professor at the University of Hong Kong and an expert on higher education in China.

They have to compete for jobs in the big cities with thousands of other well-qualified graduates, including many from families who have lived in the main cities for several generations and therefore have better networks to assist in job hunting.

In addition, families from the countryside go heavily into debt in order to pay for higher education, which cannot easily be paid back with the kinds of jobs available in rural areas.

Several colleges and universities are allowing students to use their final semester to spend time looking for jobs, including going abroad for internships. The job-hunting season already began in mid-February, according to many institutions.

Overhang

An overhang estimated at 600,000 students who graduated last year and who have not yet found employment, will add to the number of graduate job seekers overall, according to official estimates.

The situation is worrying for the Chinese government.

"If university students do not have a job they could threaten stability," Yang Rui told University World News, adding that the figures could be even worse as university leaders in China "often manipulate the figures" to downplay the problem.

The 2013 Blue Book of Global Talent, an annual report on Chinese studying abroad, said the percentage of Chinese students returning from overseas increased by over 46% in 2012.

But three quarters of those who responded to the survey by CASS said their salaries on return were much lower than they expected - an indication that overseas degrees are no longer the passport to a top job.

According to the official Communist Party newspaper People's Daily, two decades ago "returning overseas students had better opportunities to find a good job, but in today's intensive job market, they have few advantages over local graduates".

In particular, despite record numbers wanting to study overseas, job opportunities in countries like the US and UK have become scarce because of sluggish economic growth and tighter visa restrictions. The UK in particular has scrapped its two-year extension to allow foreign graduates to work, and has made it more difficult for students to remain.

Job market

Part of the problem is that many returning Chinese graduates have similar degrees - finance and business are the most popular. Returning students find it difficult to distinguish themselves from other overseas graduates.

At the same time, Chinese companies are seeking graduates for a large number of sales and marketing roles. Sales jobs are not popular among graduates.

They "prefer office work like administration, which we don't need", said Yu HongXing from an architectural industry training company Baigao Education, noting the difficulty in hiring graduates despite high unemployment rates.

"Our students trained in colleges cannot meet the demands of the market and it is hard for them to find jobs they like," said Wang Guangzhou, a researcher at the Institute of Population and Labor Economics under CASS, quoted in China Daily.

Others blame city, provincial and central government for allowing continued 'overexpansion' of higher education, which has led to a lowering of educational quality.

The phenomenon of 'fake prosperity' - officials overstating economic growth - has exacerbated the situation, leading families to believe that jobs will be plentiful after graduation, according to families in Guangzhou in southern Guangdong province.

Meanwhile, the Blue Book noted that students returning from overseas needed a long time to cover their education costs - almost half of the returnees looking for jobs needed five years or more to cover education costs or repay loans, making overseas study more of a gamble than in the past, when higher salaries meant the cost could be cleared quicker.